Buying a home is an exciting milestone, but it also comes with a lot of moving parts—and none more important than getting your funds safely to the closing table. Whether you’re a first-time homebuyer or a seasoned investor, it’s crucial to understand how this process works to avoid last-minute stress or even delays in taking ownership of your new property.
Below, I’ll walk you through how funds are sent to closing, why timing matters, and why a wire transfer is often your best option.
How Funds Get to the Closing Table
When you purchase a home, you’ll be responsible for bringing your cash to close. This amount includes your down payment, closing costs, prepaid taxes, insurance, and any other applicable fees.
There are typically two main ways to deliver these funds:
✅ Wire Transfer – This is an electronic transfer directly from your bank to the title company or closing attorney’s escrow account.
✅ Cashier’s Check – This is a check guaranteed by your bank, drawn from your account and made payable to the settlement agent.
Make Sure Your Funds Are Accessible Early
One often overlooked detail is making sure your money is actually sitting in an account that allows you to send a wire or obtain a cashier’s check. For example, if you’re planning to move funds from an investment account, online bank, or multiple accounts, it’s a good idea to do this early in the homebuying process—ideally well before closing week.
Some accounts require extra processing time to transfer funds into your primary checking account, and certain banks have daily limits or restrictions on outgoing wires. The earlier you handle these transfers, the smoother your closing will be.
Why a Wire Transfer is Usually Preferred
For larger sums of money—especially over $50,000—most title companies prefer (or even require) a wire transfer rather than a cashier’s check. Here’s why:
- Immediate Verification – A wire transfer lands directly in the escrow account, and the title company can verify receipt right away.
- Reduced Risk of Fraud or Loss – Wires are tracked electronically from start to finish, while a paper check could be misplaced or altered.
- Funds Availability – Even a cashier’s check may require a hold by the bank before funds are fully cleared, delaying your ability to close on time.
Why Timing Is So Important
One of the most common misconceptions is that you can wait until the morning of closing to send your wire. In reality, banking systems have cutoff times and processing delays that can create big problems if you wait until the last minute.
Here are a few reasons to wire your funds at least 1–2 business days before closing:
✅ Wire Cutoff Times – Many banks have a 2–3 PM cutoff for same-day outgoing wires. If you initiate the transfer too late, it may not be sent until the next business day.
✅ Verification Process – Title companies require time to confirm receipt of funds and prepare final paperwork.
✅ Avoiding Delays or Postponement – If funds arrive late, your closing could be delayed, potentially incurring additional costs or even risking contract deadlines.
Can I Use a Cashier’s Check Instead?
In some cases—particularly for smaller amounts—title companies will accept a cashier’s check. However, for larger transactions, many settlement agents prohibit using cashier’s checks because:
- Banks can still place holds on cashier’s checks to confirm authenticity.
- Funds may not be immediately available for disbursement.
- There is a higher risk of fraudulent checks.
If you’re unsure what your title company requires, always check with them before closing day.
A Few Tips to Make It Smoother
✔ Confirm Wire Instructions Early – Wire fraud is a real risk. Always call the title company directly to verify wire instructions before sending money.
✔ Transfer Funds Into the Right Account in Advance – Move your down payment money into your main checking account well before closing so you’re ready to wire without delays.
✔ Schedule Your Wire in Advance – Plan to initiate the transfer at least a full business day ahead.
✔ Keep Documentation – Get a confirmation receipt from your bank so you have proof of transfer.
Bottom Line
Getting your funds to the closing table securely and on time is one of the most critical steps in purchasing a home. Wiring funds early—and making sure your money is in the right account to begin with—helps prevent delays, ensures your funds are available for disbursement, and protects you from unnecessary headaches.
If you have any questions about how this works—or want to review your estimated cash to close—please don’t hesitate to reach out. I’m here to make your home buying process smooth, safe, and successful!
